Several potential problems cropped up in Friday’s jobs report.
The big numbers in May—175,000 new jobs and a 7.6 percent unemployment rate—appear to be slightly better than the Wall Street consensus. The Bureau of Labor Statistics revised downward its payroll estimates from the previous two months by a relatively slight 12,000.
Even the routine talking points from congressional Republicans were somewhat neutered by these somewhat positive figures. Rather than blast President Obama, House Majority Leader Eric Cantor (R-VA) said, “In America we have higher expectations and we can do better.”
But the latest figures suggest contain two critical trends to monitor:
Has Manufacturing Peaked? – From the start of 2012 to this past March, the economy added 187,000 factory jobs, an average of 12,467 a month.
Obama held out the improvement in this sector as proof of a manufacturing renaissance. Assembly line careers tend to have a multiplier effect that enable the creation of service sector jobs.
But the economy has shed 21,000 factory jobs during the last three months, including 8,000 in May.
Federal Job Losses – Sequestration’s cumulative impact on the Washington regional economy has yet to be felt. But the government is clearly slashing its workforce, getting rid of 45,000 employees in the past three months.
The government has shed 129,000 workers since its payrolls hit a 14-year high of 2.87 million in early 2011.